Update: Merkin To Pay $405M in Madoff-related Hedge Fund Settlement

New York (HedgeCo.net) – Billionaire hedge fund manager J. Ezra Merkin has agreed to pay $410 million in a civil settlement negotiated by the New York State attorney general’s office and Bart M. Schwartz, Receiver of the Gabriel Capital L.P. and Ariel Fund Limited. Merkin had allegedly paid his clients with money stolen from investors in the Madoff scandal.

“I am satisfied with the settlement that’s been achieved, and I am grateful for the New York Attorney General’s leadership in the effort,” Bart M. Schwartz, the Receiver for Gabriel Capital L.P. and Ariel Fund Limited, said. “The monies realized from this settlement will help bring the Ariel and Gabriel funds’ investors closer to being made whole.”

Bankruptcy court trustee, Irving H. Picard, may challenge the settlement as part of an effort to collect money to compensate all eligible Madoff victims.

“Cash losses in the scheme are estimated at a minimum of $17 billion, but the paper wealth wiped out by the fraud totaled more than $64 billion. Madoff is serving a 150-year sentence in a federal prison in North Carolina.” The New York Times reports.